Cardano founder Charles Hoskinson has hinted at launching a class action lawsuit against individuals spreading defamation about Cardano. In an X post, he asked ADA ($0.41) holders, developers, and dApp builders if they would support or join the legal effort. He tied the potential lawsuit to an upcoming audit of Cardano’s 2017 initial coin offering (ICO) redemption process. This audit aims to address growing concerns following a wave of accusations within the community.

NFT ($0.00) Artist Sparks Controversy

Tensions flared after NFT artist Masator Alexander accused Hoskinson of misappropriating 318 million ADA tokens from the 2017 ICO. He claimed Hoskinson and Input-Output Global (IOG) embedded secret functionality in the 2021 Allegra hard fork. This alleged code, according to Alexander, allowed them to redirect ADA worth $619 million at the time into a private reserve.

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Alexander alleged only a small part of these funds helped establish Intersect, a member-based Cardano group. He claimed IOG moved the rest into a separate reserve using the alleged exploit in Allegra.

Audit Set to Clarify Claims

Hoskinson has welcomed an audit to counter the claims. BDO International and McDermott Will & Emery will conduct the audit. The firms plan to release a detailed report on the ICO and whether IOG misused any funds.

Although the publication date remains uncertain, Hoskinson has launched a community poll on X. The poll, open until May 25, shows strong support for legal action. As of now, over 10,000 people have voted, with 69% agreeing to join a class action lawsuit.

Hoskinson Slams Media Coverage

In a separate statement, Hoskinson criticized crypto media for what he called “malicious” and “clickbait” reporting. He accused outlets of ignoring facts and spreading unverified stories to drive traffic.

He stressed that no fraud evidence exists. According to Hoskinson, all parties involved in the ICO redemption have publicly confirmed no wrongdoing. He also noted that no regulator, law enforcement agency, or token buyer has accused him or IOG of fraud.

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He said Alexander has no insider knowledge of the ADA sale and that media outlets acted irresponsibly by spreading his claims. Hoskinson added that such headlines cause reputational damage that will take months and significant resources to repair.

Following the controversy, Hoskinson announced he would reduce his presence on social media. A media team will take over his accounts after the audit. He also plans to adjust his regular AMA sessions but confirmed his attendance at crypto events will continue as usual.

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